BIR Ruling [UN-387-95]

November 6, 1995 BIR RULING [UN-387-95] Atty. Bernardo S. Tamondong 2/F Our Lady of Mercy Hospital Plaza Novaliches Quezon City Gentlemen : This refers to your letter dated October 17, 1995 requesting for a ruling on whether the sale of one of the acquired/foreclosed assets the title to which is already consolidated in the name of creditor bank, the Westmont Bank, is exempt from the payment of expanded withholding tax imposed under Revenue Regulations No. 12-94 on the ground that said Bank suffered net operating losses in 1993 and 1994. Documents submitted, i.e., per income tax returns of Westmont Bank for the years ended December 31, 1993 and December 31, 1994 show that it suffered losses in the respective amounts of P305,869,413 and P192,308,462. In reply, please be informed that since Westmont Bank has suffered net operating losses during the immediately preceding two (2) years from 1993 to 1994, this Office is of the opinion as it hereby holds that the income payment made to said bank on its sale of acquired/foreclosed assets to your client is exempt from the payment of creditable expanded withholding tax pursuant to Section 4(d) of Revenue Regulations No. 6-85 as amended by Section 3 of Revenue Regulations No. 12-94 (BIR Ruling No. 126-94 dated August 15, 1994) This ruling is being issued on the basis of the foregoing facts as represented. However, if upon investigation, it will be disclosed that the facts are different, then this ruling shall be considered null and void. cdtech Very truly yours, ALICIA P. CLEMENO Asst. Commissioner (Legal Service)